Dr. Phillip A. Sharp, a professor at Massachusetts Institute of Technology, is seen in his laboratory at the Center for Cancer Research at MIT in Cambridge, Mass., Wednesday, July 16, 2003. Sharp said the emerging field of RNA interference has changed his research. The process, discovered by scientists in recent years, uses double stranded RNA to silence genes, which could help quash the effects of destructive genes behind cancer and other diseases. (AP Photo/Chitose Suzuki)

The departure of Sharp and Gilman, two Nobel laureates who bolstered the credibility of the taxpayer-funded program, may erode confidence in the agency.

"This past spring the peer review system of CPRIT was dishonored by actions of CPRIT's administration when a set of grants were delayed in funding because of suspicion of favoritism," Sharp wrote in a resignation letter dated Monday.

The research grants, designated for Texas cancer scientists, were delayed because administrators and members of the initiative's oversight committee, principally Houston-based biotech investor Charles Tate, intervened to hasten approval of an $18 million grant led by the University of Texas M.D. Anderson Cancer Center.

The grant's lead investigator, Dr. Lynda Chin, sought the money in order to speed the process of bringing experimental cancer drugs to market. The hasty approval of that grant led Gilman to announce his resignation.

The cancer agency's executive director, Bill Gimson, said the resignations were not unexpected.

"It's natural that with Dr. Gilman leaving, that folks he selected to be reviewers here will also leave," Gimson said. "I think this is a natural evolution of the process."

Gimson said the agency's leaders had identified half a dozen "stellar candidates" to replace Gilman.

Texas voters in 2007 overwhelmingly approved creating the institute, which receives $300 million annually to fund cancer research and prevention in Texas. It hired Gilman to establish an unbiased review process that would ensure the best research received funding.

Some of the four remaining members also are expected to resign this week.

Gilman said he remains wary of the intent of the politically appointed oversight committee, which has authority over management of the agency and its $300 million annual budget.

"It would appear from the spate of resignations that are coinciding with those of Phil Sharp and myself that CPRIT's peer review system is collapsing in reaction to the events of the past several months," he said. "This is a sorrowful event."

Gilman said leadership changes on the oversight committee are needed.

"If such changes were to occur, CPRIT would again have a bright future, bringing insights into the complexities of cancer and stimulating the development of new therapies for the ultimate benefit of people everywhere," he said.

In resignation letters, the scientific reviewers cited concern about the process for commercial grants. These grants do not pay for scientific research, but rather seek to fund work needed to bring drugs from the lab into hospitals.

The controversy surrounding the M.D. Anderson commercial grant included questions about influence exercised by Tate and by Chin's husband, Dr. Ronald DePinho, the president of M.D. Anderson. In response, the state agency sought to reform its grant procedures, adding scientific review of the merits of commercial proposals.

But in his resignation letter this week, Kaelin indicated this system may not be fail-safe.

"I recently learned that at least two scientific reviewers who had given nonfundable scores to a commercialization project were asked by CPRIT to 'reconsider' their scores so that they would be in harmony with those given by the commercial reviewers, who were much more favorable," Harvard's Kaelin wrote in a letter to Gimson on Tuesday.

"I am not confident that scientific quality and rigor will triumph over grandiose promises and hucksterism," he wrote.